Building & Renovating Guide

A Consumer
Guide
BUILDING AND
RENOVATING
IN THE NT
www.nt.gov.au
December 2011
DEPARTMENT OF LANDS AND PLANNING
ii
Consumer Guide
ii
Acknowledgements
The Department of Lands and Planning acknowledges with thanks that
certain content of this document has been reproduced from various internet
publications with permission from the following copyright owners:
Environment and Sustainable Development (ACT):
http://www.actpla.act.gov.au/publications_forms/publications
NSW Fair Trading (New South Wales):
http://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Home_
building_and_renovating.html
Queensland Building Services Authority (Queensland):
http://www.bsa.qld.gov.au/FormsPublicationsProducts/Publications/
Pages/Publications.aspx
Offce of Consumer and Business Affairs (South Australia):
http://www.ocba.sa.gov.au/consumeradvice/renovate/index.html
Consumer Affairs and Fair Trading (Tasmania)
http://www.consumer.tas.gov.au/publications/search_topics?queries_
topic_query=building&topic_query_logic=AND&search_page_111936_
submit_button=Submit&current_result_page=1&results_per_
page=15&submitted_search_category=&mode=
Consumer Affairs (Victoria):
http://www.consumer.vic.gov.au/CA256EB5000644CE/page/
Building+and+renovating-For+home+owners+and+buyers-
Contracts+for+building+projects?OpenDocument&1=09-
Building+and+renovating~&2=10-For+home+owner-
s+and+buyers~&3=070-Contracts+for+building+projects~
Department of Commerce (Western Australia):
http://www.commerce.wa.gov.au/ConsumerProtection/Content/Property_
renting/Home_building/index.htm
Building and Renovating in the NT 1
Consumer Guide
Contents
Contents
1.0 INTRODUCTION 3
1.1 Building defnitions 4
1.2 What does a builder do? 4
1.3 Building control areas 4
1.4 The Building process permits and paperwork 5
1.4.1. Preparing Plans 5
1.4.2. Applying for a Building Permit 6
1.4.3. Assessment by a Building Certifer 6
1.4.4. Building Permit 7
1.4.5. Before Construction Starts 7
1.4.6. Inspections 7
1.4.7. Completion 7
1.4.8. Occupancy Permit 7
1.4.9. What happens if your Building Permit lapses? 8
2.0 WHAT CAN I AFFORD TO BUILD? 9
2.1 Budget 9
2.2 Finance 9
2.3 Government assistance 9
3.0 CHOOSING THE LAND 10
4.0 BUILDING OPTIONS 10
4.1 Project Homes 10
4.2 Display homes 10
4.3 Individually designed homes 11
4.3.1. Selecting design services 11
4.3.2. Your role in the design process 11
4.3.3. The designers role in the design process 11
4.3.4. Questions to ask the designer in your frst meeting 12
4.4 What is and isnt included in the price of the home? 12
5.0 EXTENDING AND RENOVATING YOUR HOME 13
6.0 CHECKING YOUR BUILDING PLANS 13
7.0 CHOOSING A BUILDER OR CONTRACTOR 14
8.0 BEFORE YOU SIGN THE BUILDING CONTRACT 15
8.1 Contract Checklist 16
8.2 Are terms of your contract unfair? 17
8.3 Tips for avoiding contractual disputes 17
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Consumer Guide
8.3.1. Builders and trade contractors 17
8.3.2. Consumers 17
9.0 BEFORE CONSTRUCTION STARTS 18
9.1 Checklist 18
9.2 Building certifer 18
9.3 Insurance 18
10.0 ONCE CONSTRUCTION STARTS 19
10.1 Construction checklist 19
10.2 Changing the contract 19
10.3 Inspections 20
10.4 Progress payments 21
10.5 Completion, handover and fnal payment 21
10.6 Occupancy Permit 22
11.0 BUILDING DISPUTES 23
11.1 Consumer guarantees for services 23
11.2 Talk to the builder 24
11.3 Write a letter to the builder 24
11.4 Dispute resolution 24
11.5 Take formal action 25
12.0 OWNER-BUILDER 26
12.1 Mandatory insurance requirements 27
12.2 Other insurance to consider 27
12.3 Tradespeople 27
12.4 Tips 27
13.0 TERMITE PROTECTION 28
14.0 GLOSSARY 29
15.0 WHO TO CONTACT 32
16.0 DISCLAIMER 32
CHECKLISTS 33- 36
1. Building
2. Before signing a contract
3. Before construction starts
4. Construction
Consumer Guide
Building or renovating your home can
be a rewarding experience, but the
process can be complex. Before you
start, there is a lot of information to collect
and important decisions to make. Take
your time and research thoroughly as
this could be one of the largest fnancial
decisions you will ever make. This guide
has been prepared to help you on this
journey. Checklists have been included at
the end of this document to assist you.
If you are considering building a new home you can
choose to:
Buy a house and land package;
Build a house based on a display home on your
own land;
Build a home through a sales agent;
Use a designer and a smaller building company;
Use a small design and build company;
Become an owner builder; or
Buy a home being constructed off the plan.
If extending or renovating your home you can:
Use a company that manages your plans,
building permits and construction;
Use a designer and a smaller building company;
Use a small design and build company;
Engage a builder to supervise the entire project
and coordinate subcontractors for you; or
Become an owner-builder.
The level of involvement in your project will vary
according to the option you choose.
1.0 Introduction
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Consumer Guide
TIER 1
Darwin, Lake Bennett and Alice Springs Building
Control Areas
TIER 2
All other Building Control Areas
Full certifcation process applies for all buildings.
For prescribed building works* full certifcation includes;
building permit;
mandatory inspections;
builders declaration; and
occupancy permit.
Prescribed building works* must be built by a
registered building contractor residential or an approved
owner-builder.
Building Code of Australia (BCA) and technical regulations
apply in full.
Home warranty insurance (HWI)** will be required.
Full certifcation process for all buildings other than those
specifed below.
For prescribed building works* except for Class 1a
attached duplexes etc and Class 2 attached units etc the
following part certifcation applies:
building permit;
no mandatory inspections;
builders declaration; and
no occupancy permit.
Prescribed building works* must be built by a
registered building contractor residential or an approved
owner-builder.
Building Code of Australia (BCA) and technical
regulations apply in full.
Home warranty insurance (HWI)** will not be required.
1.1 Building defnitions
Understanding the language of residential building
can help you to avoid problems. It is recommended
that you read the Glossary at the end of this
document.
1.2 What does a builder do?
Many builders do not actually do building work
themselves. They:
Manage and coordinate home building or
renovation projects;
Manage the purchase and delivery of materials;
and/or
Subcontract the work of tradespeople such as
electricians, plumbers, bricklayers, painters and
carpenters during the course of construction.
The builder is required to ensure that any persons
engaged are appropriately qualifed.
A tradesperson works in a particular feld in the home
building industry, for example: concreters, bricklayers,
carpenters, electricians, plumbers, plasterers, tilers,
painters, fencers, and gasftters.
1.3 Building control areas
In recognition of the diffculties and costs related to
engaging building certifers in areas remote from
Darwin and Alice Springs, from 3 July 2006 the
Northern Territory (NT) Government established a
two-tier Building Control Area system. The following
table provides details of the certifcation requirements:
*Prescribed building works are works worth more than $12,000 on:
Class 1- a detached single house and attached duplexes etc;
Class 2 - attached units, fats etc;
Class 10 - garage, carport, etc attached to and built at the same time as the Class 1a or Class 2 and
a retaining wall that is not attached but is integral to the structural integrity of the building.
** Home Warranty Insurance has not been introduced to date - Home Building Certifcation Fund requirements apply.
Consumer Guide
1.4 The Building process permits
and paperwork
Building work requires permits and paperwork prior to
work commencing and on completion. It is important
that you understand the building process and what
documents are required by the NT building legislation.
These documents are designed to protect you.
The frst thing to consider is whether or not you will
need a permit for your project. The Building Checklist
on page 33 provides a general overview of what
building works require a contract; building permits;
insurance and registered builders.
Building permits relate specifcally to the construction
of a building. You may also require a planning permit
(known as a Development Permit) that needs to be
submitted with Development Assessment Services (for
example, side and rear setback variations for single
dwellings). If a planning permit is required, it must be
obtained BEFORE a building permit can be issued.
A planning permit does not remove the need to
obtain a building permit. Talking to Building Advisory
Services or Development Assessment Services (refer
to page 32, Section 15.0 Who to Contact) and/or a
building professional will be able to give you some
initial advice about the permits required.
Contributions must be made to the Home Building
Certifcation Fund (HBCF) Insurance Scheme for
all residential building work prior to the issue of a
Building Permit. Contributions must be made by
the builder at any Territory Insurance Offce (TIO)
on behalf of the owner and are based on the value
of the building work.
The following provides a brief summary of what is
involved in getting building approval:
1.4.1. Preparing Plans
You must prepare plans for the structure you want to
build. It is a good idea to seek the help of a building
professional who knows the NT building system.
This will ensure fnished drawings are accurate, clear
and complete.
Drawings should include an accurate and to scale
site plan, foor plans, elevations and structural
detail. A structural engineer must approve the
structural details.
If a planning permit is required, it must
be obtained BEFORE a building permit
can be issued.
To see if a property is within a building
control area, please check the following
website: www.nt.gov.au/lands/building/
regulations/areas/index.shtml
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Consumer Guide
1.4.2. Applying for a Building Permit
You must engage a NT registered building certifer to
issue a Permit to Build (Building Permit) before you
start building work.
A Building Permit ensures:
The required builders are registered and carry
insurance;
Adequate documentation is prepared to enable
proper and complying construction of the proposed
building;
An independent review of building documentation
occurs;
Key stages of the work are independently
inspected;
Your building is independently assessed as suitable
for occupation; and
The certainty of compliance with the building
legislation prior to building work commencing.
In the NT, building certifcation is done by registered
private certifers who assess building applications,
issue building permits, undertake site inspections and
issue permits to occupy on satisfactory completion of
any building works.
A building certifer will charge you for issuing a
Building Permit.
You will need to give your building certifer a
completed Application for Building Permit; and:
Details of the proposed structure (including
drawings);
Structural engineers certifcation for the structural
design;
Certifed plumbing design (for any plumbing work);
A statement describing the purpose of the building;
Proof that the relevant insurance has been
obtained;
Any relevant planning consents and approvals (if
applicable); and
Owner-builder certifcate (if applicable); or
Details of the registered builder by providing
evidence of a building contract (if applicable).
1.4.3. Assessment by a Building Certifer
Your building certifer will assess your application for a
Building Permit to make sure that the proposed work
complies with the Building Act, Regulations and the
Building Code of Australia (BCA). The BCA covers
issues such as structural safety, and health and fre
protection, but does not address the quality of the
work or fnish.
A list of NT registered building certifers
can be obtained from the Building
Practitioners Board website:
www.nt.gov.au/bpb
Electronic copies of the various building
forms can be found at the following
website: http://www.nt.gov.au/lands/
building/regulations/forms/index.shtml
Consumer Guide
1.4.4. Building Permit
Your building certifer will issue a Building Permit,
which is valid for two years from the date of issue. This
period can be extended by applying to your building
certifer BEFORE the expiry date.
The Permit will state at what stages inspections will
need to occur.
Amendments/variations to the approved design must
be approved by the building certifer before any
work commences.
1.4.5. Before Construction Starts
Before construction starts, your building certifer
must have:
Approved all plans;
Issued the Building Permit;
Forwarded the Permit and plans to the Regulator
(Director of Building Control), Building Advisory
Services, Department of Lands and Planning;
Checked that the building insurance has been
taken out; and
Informed the builder of the appropriate notifcation
stages (inspections).
1.4.6. Inspections
Inspections are an important part of the permit
process. Your builder will ring your building certifer to
arrange these inspections. It is vital that you ensure
that your builder arranges for these inspections to
occur. If they have not taken place, you may not be
allowed to live in your building once the work
is completed.
If you are an owner-builder, you will need to
contact your building certifer and organise these
inspections yourself.
Please note that the plumber or drainer carrying
out drainage works has to notify Building Advisory
Services of the completion of the drainage works prior
to covering up the works.
1.4.7. Completion
On completion of building work, the builder must sign
a declaration stating the building works have been
carried out in accordance with the permit.
This must be given to your building certifer before an
Occupancy Permit is granted.
1.4.8. Occupancy Permit
An Occupancy Permit is a document that shows the
building certifer is satisfed and has approved your
building as being suitable for occupation. It will only
be issued when items affecting health and safety
are in place and fully operational (e.g. water supply,
safety glass, handrails etc). It does not mean that all
the painting is done, the carpet is laid or that all the
fttings are in place. The relationship between the
Occupancy Permit and your contract should be clear
to you before signing the document. If you have any
doubts or do not understand the relationship you
should obtain legal advice.
When the building is constructed in compliance with
the Building Permit and approved plans, you must
apply to your building certifer for an Occupancy
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Consumer Guide
Permit. The building certifer will tell you what
documents need to be lodged with your application.
For example, you may need to obtain certifcates from
tradesmen on the project, for building work such as:
Plumbing;
Glazing;
Electrical;
Termite;
Prefabricated roof trusses;
Wet area sealing products;
Prefabricated window and door frames; and
Fire safety products or installations.
The building certifer must settle the application
within 20 days.
A building cannot be occupied unless an Occupancy
Permit has been issued. The building certifer must
forward a copy of the Occupancy Permit to the
Regulator (Director of Building Control), Building
Advisory Services, Department of Lands and Planning
within seven days of issue.
It is essential that you obtain a copy of the Occupancy
Permit as this shows that you can legally occupy the
building. You should keep this certifcate in case you
are ever asked for it.
1.4.9. What happens if your Building Permit lapses?
If a Building Permit lapses but building work
continues, that building work may have been required
to be inspected at one of the mandatory inspection
stages. It is diffcult to confrm the compliance of
building work after it has been completed. The
building certifer who originally issues the Building
Permit may refuse to approve the work or may
require a part of the building to be exposed to be
satisfed that the work is appropriate before issuing
an Occupancy Permit.
If a Building Permit lapses and building work is not
complete, a new Building Permit will be required to
be issued to enable completion of the unfnished
building work. This would require a new application
for the issue of a Building Permit for the unfnished
building work. The building certifer will require plans
that show the work yet to be completed. As well as the
payment of the appropriate fees. The application must
be made to the same building certifer who issued the
original Building Permit unless a termination of their
appointment has been obtained from the Regulator
Services, Department of Lands and Planning.
Consumer Guide
2.1 Budget
Have you worked out your total budget including:
Cost of land;
Land valuation;
Legal fees;
Loan establishment fees;
Insurance mortgage, building and contents;
Fees for independent legal and technical advice
throughout the project;
Stamp duty;
Settlement agents fees;
Rates;
Taxes;
Site works;
Building costs which may or may not include
the cost of mandatory inspections by a building
certifer;
Furnishing costs;
Landscaping; and
Moving expenses.
Once you have shopped around and worked how
much you think your home building project will cost,
you may consider adding on an extra 15 percent to
your estimate, to cover contingencies.
2.2 Finance
Home loans (or mortgages) are available from
banks, credit unions, building societies and fnance
companies. Have you checked whether you will
qualify for fnance? Many fnancial institutions have
brochures or information on the internet on the
different types of home loans available.
If applicable, when shopping around ask about
policies lenders have for loans to owner-builders, the
amount available as a loan, the equity required and
any other special conditions. Lenders generally have
stricter criteria for owner-builders.
You may also wish to consider going to a mortgage
broker or an independent fnancial adviser.
Key points when choosing a lender:
Shop around and get three quotes for the best
possible interest rates;
Consider total, long-term package;
Check fexibility and fees, ongoing charges and
penalties; and
Work out which product suits your needs.
You can use a mortgage simulator and comparison
rates to help make an informed choice.
Remember, when it comes to home fnance, do not
over commit, and make sure you allow for changing
circumstances.
2.3 Government assistance
Are you eligible for any fnancial assistance from
the Government? Why not check out the following
websites for further information:
http://www.nt.gov.au/ntt/revenue/home_incentives.
shtml
http://www.housing.nt.gov.au/home_ownership
http://www.ato.gov.au/individuals/content.
asp?doc=/content/00154317.htm
2.0 What can I afford to build?
Remember, when it comes to home fnance,
do not over commit, and make sure you
allow for changing circumstances.
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Consumer Guide
Factors you may wish to consider when choosing
land are:
Size will it accommodate your planned home
when you take into account the planning setbacks?
Slope, soil types and stability do you know the
full extent of the site works required for work such
as tree removal, levelling, retaining walls, removal
of clay or rocks, extra drainage etc? Does the site
contain any fll material? Soil tests will establish
whether the site can be built on, the type of
footing or slab needed, and the number of storeys
permitted;
Is the block well drained in regard to potential
surface or sub-surface run-off?
Aspect desired orientation of your house;
Easements, zoning, encumbrances which may
restrict what/where you can build;
Where are the exact boundaries and do you need
fences? Only a licensed surveyor can position
these survey pegs;
Does the locality meet your current and future
needs (e.g. transport services, schools, childcare,
shops, medical facilities, places of worship etc);
Check if any major planned works are in existence
(e.g. major highway planned in 10 years time);
Is the land within a storm surge zone? this may
affect fnance and insurance; and
Check with the local council on how much the
rates are.
Have you visited a few display homes by project
builders and also individual homes built by non-
project builders so that you really understand
the different options? You may also wish to seek
clarifcation about special offers.
4.1 Project Homes
Project home builders generally offer a selection of
standard plans covering a wide range of prices,
styles, sizes, specifcations and standards of fttings
and inclusions.
They also provide other services, including assistance
with mortgage fnance and a variety of combined
house and land packages, which may include extras
such as driveways, landscaping, appliances etc.
The advantages of project homes include:
The designs have been used by previous clients;
Some of the designs may be on display giving you
the chance to view the fnished product;
There may be cost savings (especially compared to
a custom design); and
Not having to develop a detailed design
specifcation.
Note that some changes (e.g. in design detail, room
size, standard of fttings/inclusions) will usually be
allowed, but there may be some limitations about what
you are able to do. Ask the project builder to what
extent the plans can be varied and at what cost.
4.2 Display homes
Many project builders use furnished display homes to
show some of their house designs. Whilst this allows
you to see the features of the home as a fnished
product, it is important that you realise that some of
the fttings, and design features may not be included
in the standard version of the home. It is important
that you know precisely what you will get if you decide
to contract with the builder. Remember to check the
contract and specifcations.
3.0 Choosing the land 4.0 Building options
Consumer Guide
Some of the following items will NOT normally be
included in your contract, even though they may be
seen in the display home:
Loose furniture;
Security systems;
Floor coverings;
Dishwashers, washing machines and loose
electrical appliances;
Curtains, blinds, light shades, wallpaper, and
fxed mirrors;
Garages/carports;
Security and fy screens;
Concrete or tiled foors under the entry porch or
verandah;
Driveways, paths, landscaping and gardens;
Garden sheds, and outdoor furniture;
Fences and pergolas;
Letterbox and clothes line;
Pools and spas;
Only a limited range of building materials are
usually included in the standard price of the home.
Check if other building materials are available and
at what additional cost; and
Although brick homes are often displayed with
coloured mortar natural and light grey mortar
is usually standard and other colours may cost
much more.
The price of a display home is usually based on
construction on a fairly fat block with a stable soil type
and little or no underground rock. It may cost a lot
more if you have a steep slope, unstable soil or rock
beneath the surface.
4.3 Individually designed homes
A home can be designed by anyone or you can
engage a design professional to do the work.
A design professional can provide plans and
specifcations that match your needs, preferences,
budget and/or the aspect and shape of your land.
Design services can be provided by:
Architects;
Builders;
Building designers; and
Engineers.
4.3.1. Selecting design services
When selecting design services you should:
Be clear about what your needs are and the extent
of work you require to be done;
Make a list of designers using information from
relevant professional organisations; advertisements;
trade and business directories; and personal
recommendations;
Make a time to meet onsite and determine if you
can work together;
Obtain comparable quotes which clearly state what
work and services they cover;
Look for value for money but not necessarily the
cheapest quote; and
Check the past performance by contacting
previous clients (ask the designer for a client list).
4.3.2. Your role in the design process
Before your designer starts any work you should work
out and talk to them about the following:
Your budget for the construction or renovation work
you are seeking to be designed;
The design features and facilities e.g. overall
size and shape of the home; number and location
of the bedrooms; ceiling height; window sizes and
details. It would be helpful to show the designer
any photographs, sketches, magazines etc of the
things you like;
The specifcations, fttings and materials to be
used;
Time constraints and expectations - when do you
need the fnal plans to be ready for approval?
If you want exclusive copyright ownership to the
house plans you and the designer will develop - be
sure to document this in your written agreement.
4.3.3. The designers role in the design process
Design professionals are expected to keep up to
date with legislation, information and trends relating
to the building process and can help you to clearly
defne your needs and preferences. The designer
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Consumer Guide
can also advise you on environmental and energy
considerations including ventilation, insulation, choice
of building materials, feasibility of solar power, and the
most appropriate orientation with regard to sun and
prevailing winds, landscaping etc.
4.3.4. Questions to ask the designer in your
frst meeting
The following list of questions to ask at the initial
discussions can help you assess the designer and
determine exactly their role in your project:
In addition to preparing the design and working
drawings (full technical plans drawn to scale
showing internal and external dimensions), ask if
the designer provides other services, such as:
- site inspections (to ensure characteristics of the
block and its environment are fully considered);
- sketches of the elevations (i.e. three dimensional
side views of the house as it will look when the
work is completed);
- preparation of tender documents (if the job goes
to tender); and
- preparation and lodgement of documents
(including plans) for approval.
Does the designer know the area in which you
intend to build?
Does the designer check for easements and the
location of utilities (e.g. sewerage pipes) which
could affect the siting and design of the house?
Will the designer liaise with the Government
town planners to ensure any special planning
requirements are included in the plans before they
are submitted for approval?
Will the designer liaise with the building certifer
or is this something you will have to arrange and
pay for?
What upfront deposit does the designer require
before they start work? Be sure you get receipts for
all payments and do not make the fnal payment
until all work has been completed;
How is the designers fee calculated (e.g. a
percentage or fxed sum)?
What additional information or assistance does the
designer require from you?
What procedures and/or costs apply if you wish to
vary the plans after they are completed?
When will the design be ready?
Who will own the design copyright and how could
this affect the design cost?
4.4 What is and isnt included in the price of
the home?
Do you fully understand what is and is not included in
the price of your new home? Get everything in writing,
including these types of features:
Paths and driveways;
Crossover (is located between the road edge and
the property line to allow access to your property);
Carport foor;
Garage doors;
Fencing;
Retaining walls;
Hot water service (including details of type and
size);
Light fttings;
Quantity and location of power points;
Television antenna and outlet;
Garden taps;
Window locks;
Flyscreens;
Roof insulation;
Vanity cupboards;
Shelving to cupboards and robes;
Wall painting (specify how many coats of paint);
and
Floor tiling (including the laundry).
Copyright laws apply to building plans. These laws
prohibit (and penalise) any unauthorised copying or
use of plans belonging to someone else (e.g. plans
obtained from another designer or project builder).
If in doubt, check with the Australian Copyright
Council on (02) 8815 9777.
Consumer Guide
The process of extending and renovating is similar to
building a new home. However, the key difference is
the need to consider and match up existing materials
and fnishes.
Renovating refers to upgrading or remodelling a home
which does not add additional foor area to the home.
Your planning process should include an assessment
of the completed project and what effect it may
have on the capital value of the property. This is an
important exercise and it should deal with the risk
of over-capitalising. To assist you with this exercise
you need to establish the current value of your home.
Local real estate agents are usually happy to give
advice on values and prices in your area.
Checklist:
Ensure the existing home is structurally sound and
has the required building approvals;
Find out what permits you need;
Before you get design and plans done, check for
any covenants, building envelopes, easements that
may restrict your building; and
Assess the space that you want and can afford.
Make a detailed list of your specifc requirements
and desires.
Some homeowners move out for the duration of the
renovation. Remember to factor the cost of rent into
your budget and liquidated damages (penalties stated
in your contract that the builder is required to pay
you if building goes beyond the contracted
completion date).
Have you checked all your plans and specifcations
thoroughly? Make sure you fully understand the
plans and all of the symbols used;
If you selected from a display home, have you
taken the plans along and checked the features
and the measurements of the rooms and
fxtures installed?
Have any changes or any extras that may have
been offered or agreed to by the builders sales
consultant been included on the plans or in
the specifcations?
Have all of your selected materials and design
changes been included in the drawings and/or
specifcations?
Are the locations of power points, taps, light fttings,
and TV fttings where you want them?
Have you checked the total cost of any changes
you have made to the original plans?
Are you still certain that you are able to meet the
total fnancial commitment?
5.0 Extending and
renovating your home
6.0 Checking your
building plans
14
Consumer Guide
There are many ways you can fnd a builder, including:
Asking recommendations from family and friends;
Asking building professionals for a
recommendation;
Looking through the yellow pages and newspapers;
Searching the internet; and
Contacting building associations, such as the
Master Builders Association (telephone 08 8922
9666) and/or the Housing Industry Association
(telephone 08 8941 2777).
Have you thoroughly researched the builder you are
considering contracting with? Are they registered
in the NT? You should visit the register of building
practitioners on the Building Practitioners Boards
website to confrm that your builder is registered
before and during construction. How long has the
builder been in business? Have they traded under
another name?
You can also get information about companies
and individuals from the Australian Securities and
Investments Commission, either:
By searching its free registers on its website at
www.asic.gov.au/search;
Using information brokers (see www.asic.gov.au/
informationbrokers), or
Going into one of its Service Centres.
The Commission also has an information sheet
Dont get burned which has tips on avoiding
dubious operators and reduce your chances of
being swindled. Visit the following website for more
information: http://www.asic.gov.au/asic/asic.nsf/
byheadline/Don%27t+get+burned?opendocument
It is good practice to obtain three written quotes from
different builders using the same scope of works.
Always ask the builder to provide you with an itemised
quote. This will allow you to compare prices and also
to detail any prime cost items such as sanitary ware,
tiles, whitegoods or carpets.
Quotes and estimates are different. An estimate is
a reasonable guess of the costs involved without
knowledge of the exact extent of the work to be
done or the exact costs and standard of materials.
An estimate, even if written, will not bind the person
providing it to you and you can end up paying more or
paying for work you did not specifcally authorise.
A quote will become a legally binding contract once
the builder offers the consumer work for a fxed
price, and the consumer accepts the offer and any
conditions. The quote should detail all the work to be
done and materials to be used. It should have a time
limit for which the quote is valid. The quote should
always be fxed and state how long it is fxed for. Cost
plus quotes are based on an hourly rate plus costs,
and do not guarantee a set price.
Do you fully understand what is and what is not
included in the price of the house? (please refer to the
list 4.4 at page 12). Check with the builder whether
7.0 Choosing a builder
or contractor
It is good practice to obtain three written
quotes from different builders using the
same scope of works.
Consumer Guide
the cost of fxtures and fttings shown on the plans and
specifcations is included in the price. Make sure the
quotes you receive itemise the GST payable.
The builder should visit your building site to clarify
what extras may be required to address the particular
site conditions. Such extras may include:
A surcharge for building outside the builders
normal geographical area;
Site access problems for delivery of materials;
Unusual footings;
Extra long connections to drainage, water or
electricity;
Engineering fees;
Rock excavation; and
Drilling under roads for service connections.
Have you compared the different itemised quotes
and builders past work? Ask the builder to provide
you with contact referees and a list of addresses
for building work they have carried out in the past
12 months.
It is important that you are able to communicate well
verbally and in writing with your builder. The quality of
your relationship with your builder will affect the quality
of your building experience. If you have any doubts,
keep looking.
Ask past clients:
Did the builder provide documents that clearly
detailed and priced the work to be done?
Did the builder provide good customer service?
Did the builder stick to the agreed costs and
timings?
Would you engage that builder again?
The Building Act and Regulations require that if you
do any of the following works you must enter into a
building contract with a NT registered builder prior to
any work commencing:
A detached house;
A carport or verandah (if constructed at the same
time as the house);
A retaining wall relating to the structurally integrity
of a house;
Extensions to the foor area (e.g. adding a room);
AND
If the building work is worth more than $12,000.
If your proposed building work does not fall into any
of the above categories, regardless of the size and
the price, NT Consumer Affairs still recommends
that you have a written contract or agreement that
includes plans and specifcations for works, items to
be supplied, the amount agreed upon and full contact
details of the trader including an address and an
Australian Business Number (ABN).
A building contract outlines the general rights and
responsibilities of you and the builder. Your builders
responsibility is to build your home in accordance
with the agreed and approved plans and contract
documents. All building contracts, regardless of the
price, include warranties by the builder to:
Carry out the work in a proper and workmanlike
manner, in accordance with the plans and
specifcations set out in your contract;
Ensure all materials supplied by the builder are
good and suitable for any specifed purpose;
Carry out the work in accordance with all relevant
laws and legal requirements;
Carry out the work with due care and skill and
complete works by the date (or within the period)
specifed by the contract and if no time is set, within
a reasonable time; and
Ensure new homes, extensions, renovations are
suitable for occupation when completed.
8.0 Before you sign the
building contract
16
Consumer Guide
Your responsibility is to pay for the work in accordance
with the contract, and to communicate your choices,
decisions, changes and any concerns you may have
to the builder. If either of the parties fails to do what
they say, they may be in breach.
For most building contracts, a fgure can be calculated
for the total cost of the building project. Such
contracts are called lump sum contracts. Contracts
that allow the costs of the project to be calculated as
a running tab are called cost-plus contracts. As it
is diffcult to monitor and control the ongoing costs of
a building contract, it is recommended that you think
very carefully and seek expert advice before entering
a cost-plus contract.
8.1 Contract checklist
PRIOR to signing the contract, you should consider
the following:
Once you have selected the builder, is the contract
in English and legible? Do you understand the
contract? Do you need any legal advice? Are
the contract documents fully completed? There
should be no blank spaces and the contract should
include everything that has been discussed;
Does the contract include all of the following which
are required in the Building Regulations?
- the building work to be carried out on
a single project;
- the name of the building contractor;
- the building contractors registration number;
- the extent and the value of the work (all the
work you want done should be clearly detailed
in the contract and supported by appropriate
plans and specifcations that you have checked
thoroughly. You could consider speaking to
someone who has knowledge of construction
matters who may be able to advise you whether
the contract contains enough detail);
- if the contract requires the payment of a deposit
it must specify the amount which must not be
more than 5% of the value of the work;
- the stages of the work to which progress
payments are linked;
- the amount of each progress payment; and
- sets out a process of resolving disputes
between the building contractor and the owner
of the land;
Do you understand all the terms and are they
clearly defned in the contract? Consider for
instance the term lock up stage might mean
something completely different to you and the
builder;
Does the contract specify a start and fnish date,
or the number of days it will take to complete the
work? Consider what happens if there are lengthy
delays are you protected?
What happens if the work is not completed by the
builder within the time allowed for in the contract?
Will you receive any compensation for any costs/
losses (known as liquidated damages, for example
will the builder agree to pay your rent if you are
living elsewhere)?
What happens if you are late making a progress
payment?
Do you understand your rights to visit the building
site for the purpose of inspecting and viewing
the works?
If you have informed the builder of any special
requirements and fnishes, are they clearly written
in the contract?
What standard of work do you expect and is this
the same standard required under the contract?
Consider that your expectations may
be different;
Are you or the builder able to make any changes
(variations) to the contract once the project
has started? If so, you need to ensure that any
changes to the contract are priced; recorded in
writing; supported by plans and specifcations (if
applicable); and a reasonable estimate of any delay
to the work which may result from the variation is
provided by the builder;
Do the staged payments match the value of
the construction at each stage? Consider what
may happen if you pay for more than has been
constructed. You could engage the services of
Consumer Guide
a quantity surveyor to advise you on the costs
of construction and the total cost each progress
payment. The fnancial effect of paying for work
not yet constructed can be disastrous in the event
of the death of a builder or the collapse of the
building company;
You should consider approaching your fnancial
lending institution; they may be able to advise
you further about progress payments; whether
they require inspections at each stage; and/or a
valuation service. In some cases they may wish to
make the payments on your behalf; and
What happens in the event of the death of a builder
or the collapse of the company?
8.2 Are terms of your contract unfair?
Laws protecting you from unfair terms in consumer
contracts came into effect on 1 July 2010. The laws
offer you increased protection in circumstances where
you have little or no opportunity to negotiate with the
business. For more information on:
How you can tell if a term in your contract is unfair;
If there are any terms or contracts that the law does
not apply, or
What you can do if there is an unfair term in your
contract?
Visit the Australian Competition and Consumer
Commission website:
http://www.accc.gov.au/content/index.phtml/
itemId/930016.
8.3 Tips for avoiding contractual disputes
8.3.1. Builders and trade contractors
Builders and trade contractors should ensure that:
Their registration or licence is current and
appropriate for the work to be done;
The nature of the work to be done, how long it will
take and exactly what it will cost, are explained and
given in writing to you;
Any variations (e.g. price or scope of works) are put
in writing and given to you;
All parties understand their rights and
responsibilities and sign the contract; and
You are given a copy of the contract at the
appropriate time.
8.3.2. Consumers
You should ensure that:
You are clear and consistent in describing the
building works you want;
You talk with your builder regularly about the
progress of the building project and discuss any
concerns you have as soon as they arise. Ask
questions if in doubt;
You regularly inspect the work with the builder or
site supervisor (e.g. at progress payment stages);
and
You keep a diary of progress and meetings relating
to the building project (including photographs with
dates), and discuss any concerns you have as
soon as they arise.
Laws protecting you from unfair terms in
consumer contracts came into effect on
1 July 2010.
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Consumer Guide
9.1 Checklist
Has the contract been signed by both parties?
Has the builder given you a complete, signed set of
the contract documents?
Have you provided proof of ownership of the land to
your builder?
Has the Building Permit been issued?
If building in a suburb with development covenants,
has the developers approval (if applicable), been
received by the builder?
Is the proposed work on your land totally contained
within the boundaries of your block; correctly
positioned on your block and in relation to your
block boundaries; and set out in accordance with
the design plans? To be confdent that the building
accurately conforms to these things, employ a
registered surveyor. The surveyor will visit on site
and take measurements to locate block boundaries
and then place markers so the builder knows
exactly where to commence work;
Has confrmation of fnance approval been
received? Your builder may request a copy of the
fnance approval; and
Has the builder invited you to attend a pre-start
meeting? At that meeting you will be asked to make
a number of important decisions about the types of
materials and fttings and about colours. If you must
make any last minute changes, make them now and
not after construction starts unless the contract has
been amended accordingly.
9.2 Building certifer
A NT registered building certifer must be engaged
before any building work starts. The building certifers
role is to:
Issue a Building Permit which is valid for two years
from the date of issue. This period can be extended
by applying to the building certifer BEFORE the
expiry date;
Inspect the works to ensure they comply with
Building Act and regulations;
Issue the Occupancy Permit; and
Forward the Permit and the plans to the Regulator
Services, Department of Lands and Planning within
seven days of issue.
Before constructions starts, the building certifer must:
Approve all plans;
Check that building insurance has been taken out;
Issue the Building Permit; and
Inform the builder of the appropriate notifcation
stages (inspections).
You or your builder can engage a building certifer.
A list of NT registered building certifers can be
obtained from the Building Practitioners Board
website: www.nt.gov.au/bpb
9.3 Insurance
You should ask your builder to provide you with a copy
of a certifcate of currency to ensure they have, as a
minimum, the following insurances:
Builders all risk insurance;
Public liability insurance; and
Workers compensation insurance.
Your builder is usually responsible for insuring your
home during construction; however this will depend
upon your contract. You should read the contract
carefully to determine your responsibility.
Insurance is particularly important when renovating
a home as household items can be easily damaged
during the building process.
You should also check with home insurer as to whether
they will cover your home for damage or loss during
the construction period.
9.0 Before construction
starts
Consumer Guide
It is the responsibility of you and the builder, working
together, to ensure that the building works are
constructed to an acceptable standard of quality
and fnish. Day to day supervision on site is the
responsibility of the builder. Do not give instructions
direct to the subcontractors because this will cause
confusion and may be in breach of your contract with
the builder.
Discuss with the builder any queries or problems you
may have about delays, quality of workmanship, or
any other issues as soon as they arise.
For anything other than a very minor problem,
consider confrming your views in writing to the builder
as this may assist you with clarifying the issue at a
later time.

10.1 Construction checklist
You should be given the name and phone number
of your contact person in the builders offce;
You should only deal with the builder and
the builders supervisor on-site and not the
tradespeople on-site;
You should confrm all the important agreements
or comments in writing during the home building
period;
You should arrange with the builder to access the
site for the purpose of inspecting and viewing the
works. Check to see what does your contract say?
You should arrange to take photographs of the work
at regular intervals, particularly any part of the work
that may be of concern to you; and
You should purchase a diary to record all the day to
day happenings, including the time and date of all
telephone conversations as well as the name of the
person you spoke to and what was discussed.
10.2 Changing the contract
Remember you can only get the materials, size, style
and quality of items and works specifed in your
contract. Any change to the scope of the work to be
done under a contract is known as a variation.
You should note that just because a variation may
involve deleting some work that was included in the
original contract, it does not automatically follow that
the price will go down, or that there will not be extra
costs involved.
Unfortunately, variations are frequently the cause
of disputes (particularly where there is a lack of
adequate documentation to support them).
If you wish to request a variation, you should put your
request in writing to the builder. The builder should
record all variations in writing as soon as practicable.
The variation document should:
Describe the variation;
State the reason for the variation;
10.0 Once construction
starts
Day to day supervision on site is the
responsibility of the builder. Do not give
instructions direct to the subcontractors
because this will cause confusion and
may be in breach of your contract with
the builder.
20
Consumer Guide
Provide a reasonable estimate of any delay to
the work which may result from implementing
the variation;
State the change to the contract price or at least set
out the method for calculating the price change;
Indicate when any increase in the price as a result
of the variation is to be paid or when any decrease
is to be taken into account; and
Be signed by the builder and yourself.
If the variation means additional work, it must be
documented BEFORE the work is carried out.
If the builder asks you to agree to a variation and it
involves additional work, you are only liable to pay
for that extra work if it is work the builder could not
reasonably have foreseen at the time of contracting.
In any case, the builder must still provide the written
documentation as detailed above and must not
demand payment before the work is started.
10.3 Inspections
Building inspections for residential building works are performed by the building certifer to ensure the work
complies with approved plans and recognised building standards including the Building Code of Australia (BCA).
The building certifer will tell you when inspections are required and are listed on the Building Permit. It is also a
good idea to check what inspections have been included in your contract. Your builder has to let the certifer know
when an inspection stage has been reached. If you are an owner-builder, you will need to contact the building
certifer and organise these inspections yourself.
The inspection stages for residential building works are outlined below:
Remember: If the plans are amended/varied during
the construction period, you must tell the building
certifer so that an amended Building Permit can be
issued BEFORE the varied work starts.
Inspection Stage Description
1 Pre-pour Before pouring the footings, ground foor slab or other in situ concrete
building element
2 Frame Before covering the framework for foors, walls, roof or other building element
3 Block wall Before pouring any reinforced masonry or block walls
4 Fire separation (duplex/unit etc) Before covering walls, foors or ceilings, for the purpose of checking that fre
resistance levels comply with the Building Code (see note below)
5 Wet area Before covering waterproofng in wet areas
6 Final After completing the building work but before issuing an Occupancy Permit in
relation to the work
Note: A fre separation inspection may form part of an inspection of the building work carried out at one or more of the other inspection stages.
Consumer Guide
In addition to these building inspections, there are
also mandatory plumbing and drainage inspections
prior to covering up those works.
Where the builder has engaged the building certifer,
it is normal practice for the builder to provide you
with copies of each certifcate of inspection as they
are issued. As soon as is practicable after the work
is completed, the builder should also provide you
with copies of other contract-related documents such
as reports, notices or orders issued by suppliers
of service, including, for example, electricity, gas,
telephone, water or sewerage. Check your contract to
see what it says.
10.4 Progress payments
Your builder may ask you to make payments so that
they can pay for materials and labour as they go.
Progress payments are usually made at specifc
stages of a project (e.g. when a slab is laid) and
should equate to the value of the work done. Make
sure the dollar value placed on each stage is realistic.
Never pay for work that has not been performed or
pay any money in excess of that required under the
contract. Also, make sure that progress payments are
for work done and not simply time on the job.
Sometimes the fnancial institute lending you the
money for the work will have special requirements
for progress payments. If so, these will need to be
included in the contract.
At each stage when a progress payment is required
under the contract, the builder will give you a progress
claim which you must pay within the number of days
stated in the contract.
Prior to payment, carefully check the work is properly
completed up to the appropriate stage. If you dispute
all or part of the builders progress claim you will need
to respond quickly in writing.
10.5 Completion, handover and fnal payment
When construction is completed, the builder must sign
a declaration stating building works have been carried
out in accordance with the Building Permit.
When your builder advises you of the handover
date (usually two or three weeks in advance) it is
recommended that you arrange a fnal pre-handover
inspection about a week before the handover.
On the actual day of handover you should:
Check the house thoroughly for defective or
missing items;
Prepare a list of minor defects and minor omissions
including details of any items missing, damaged or
unfnished. The list should state by when the builder
is to correct each agreed minor defect or minor
omission. You and the builder must sign the list.
The defects document must also list separately any
minor defects or minor omissions which you believe
It is important for you to retain copies of certifcates of
inspection and other contract-related documents in a
safe place. These documents will help you establish that
all the building work has been properly performed should
you sell your home.
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Consumer Guide
exist but that are not agreed by the contractor
to exist;
Obtain copies of outstanding documents (e.g.
approved certifcates, appliance warranties); and
Receive an Occupancy Permit.
You should not make the fnal payment until all of
the contracted work is completed and the home is
reasonably suitable for living in.
Remember that you have made a fnancial
commitment to your builder to pay in accordance with
the conditions of the contract prior to obtaining your
house keys.
The builder has a legal responsibility to ensure
that the building work is carried out in a proper
and workmanlike manner. The builder is liable to
make good, without additional cost, defects in
the home building work notifed in writing within a
certain number of days from practical completion in
accordance with the standard form contracts that are
most commonly used in the NT.
This does not alter the builders further obligations in
law that a builder may be subject to. The Australia
Consumer Law guarantee certain matters such as
workmanship and ftness for purpose that are implied
into certain contracts (including domestic building)
regardless of whether the contract specifes those
matters or not.
A builder may also have further obligations where
a person such as an owner or subsequent owner
has suffered economic loss as a result of defective
construction. The maximum length of time that a
building claim may be brought against a builder,
based in contract or tort for damages for rectifcation
costs resulting from defective construction is 10 years
from the date the cause of action frst accrues.
10.6 Occupancy Permit
On completion of building work, you or your builder
must apply to the building certifer for an Occupancy
Permit. An Occupancy Permit will be issued if the
building certifer is satisfed that the structure is
constructed in accordance with the Building Permit
and is suitable for its intended use. The building
certifer will tell you or the builder what documents
need to be lodged with the application and must
resolve the application within 20 days.
The building certifer must forward a copy of the
Occupancy Permit and accompanying documents
to the Regulator (Director of Building Control),
Building Advisory Services, Department of Lands and
Planning, within seven days of issue.
You cannot live in a building unless an
Occupancy Permit has been issued.
Consumer Guide
Disputes between builders, trade contractors, building
designers and homeowners occur for many reasons,
including:
Inaccurate or incomplete documentation;
Poor communication;
Unsatisfactory work;
Delays; and
Lack of knowledge of building practices.
Your relationship with the builder is like any other
business relationship. It carries certain roles and
responsibilities and, it is important to know what
to do and where to go if a problem arises. Good
communication is the frst step towards fnding
a resolution.
Building disputes can be classifed into three
broad groups:
Complaints about builders;
Contractual disputes; and
Allegations of non compliant building work.
Most disputes will contain a number of allegations
and fall within the different categories of disputes.
It therefore may not be possible for you to contact one
organisation to have the entire matter resolved. For
example, the Regulator (Director of Building Control),
Building Advisory Services, Department of Lands and
Planning plays an investigative role for disciplinary
matters and offences under the Building Act; NT
Consumer Affairs provides general advice and
conciliation services; and the Local and Small Claims
Courts determine contractual disputes and awarding
of monies.
11.1 Consumer guarantees for services
The Australian Consumer Law creates a basic set
of guarantees for consumers who acquire goods
and services from Australian suppliers, importers
or manufacturers on or after 1 January 2011. These
are intended to ensure that you receive the goods
or services that you have paid for. When you have
a problem and one of the guarantees has not been
met, you are entitled to a remedy. The type of remedy
depends on the circumstances but may include a
repair, replacement, refund or having the service
performed again.
For further information visit the Australian Competition
and Consumer Commission website:
consumer guarantees on service:
itemId/961897
warranties for goods and services:
itemId/815361
NT Consumer Affairs website:
http://www.nt.gov.au/justice/consaffairs/australian_
consumer_law.shtml
11.0 Building Disputes
The builder has a legal responsibility to
ensure that the building work is carried out
in a proper and workmanlike manner.
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Consumer Guide
11.2 Talk to the builder
If you are experiencing problems with your builder,
try to resolve the problem by talking directly with
the builder. Quote details from any documentation
you may have regarding the matter e.g. contract,
quotation, invoice or receipt number. Explain the
problem and offer a solution which satisfes your
complaint. Be calm and courteous; but be frm. Keep
a record of your conversations (who you spoke with,
date and time).
11.3 Write a letter to the builder
If there is no resolution then in a signed and dated
letter you should:
Specify name and address of you and the builder;
State the address where the building is located;
Give specifc details of your complaint;
Quote details from any documentation you may
have regarding the matter e.g. contract, quotation,
invoice or receipt number;
Provide a copy of any documents that relate to your
complaint (remember to keep originals);
Provide a copy of any independent reports you
may have obtained regarding your complaint (if
applicable);
State what remedy is being sought (i.e. rectify.
compensate, attempt to settle dispute);
If payment is being sought, specify the amount and
how it was calculated;
Set a reasonable deadline for a response (e.g. 10
working days); and
Keep a copy of your signed and dated letter.
11.4 Dispute resolution
If you are unable to resolve your complaint regarding
building work informally, then you will need to fnd
out what your contract says about the process for
resolving a dispute. A process for resolving any
dispute between you and your builder should be
included in your contract.
Consumer Guide
11.5 Take formal action
Please note there may be other processes available to you other than what is listed in the table below. The table is
simply a guide to demonstrate certain outcomes that may be achieved through different avenues.
Avenue Possible Outcomes
CONDUCT OF BUILDER
Regulator (Director of Building
Control), Building Advisory
Services, Department of
Lands and Planning
Investigate and decide whether there is evidence that a builder has committed an offence
against the Building Act or Regulations or whether there is evidence that the builder is guilty of
professional misconduct;
Commence prosecution if there is evidence of an offence having
been committed;
Refer evidence of professional misconduct to the Building Practitioners Board for inquiry; and
Audit the builders work.
Building Practitioners Board Inquire into evidence received from the Director of Building Control;
Decide whether a builder is guilty of professional misconduct, negligence or incompetence;
Reprimand;
Require a builder to pay the Directors costs in the inquiry;
Require the builder to enter into an undertaking;
Require the builder to pay a civil penalty to the Territory that does not
exceed $5,000;
Suspend the builders registration; and
Cancel the builders registration.
PROMISES MADE BY BUILDERS WHICH WERE NOT KEPT OR FAILURE TO HONOUR THOSE TERMS
NT Consumer Affairs Consumer Affairs is a complaints body and is also an alternative dispute resolution service.
The service may consider the following in relation to building disputes:
Complaints about poor workmanship;
Complaints about work that does not comply with the Australian
Consumer Law;
Provide general advice about consumers and suppliers rights under the Australian
Consumer Law; and
Assist parties to reach agreement through conciliation, although the agreements are not binding.
CONTRACT TERMS, TERMS OF ENGAGEMENT OR FAILURE TO HONOUR THOSE TERMS
Community Justice Centre Mediation;
Adjudication between parties; and
Non binding decisions.
Arbitration Issue binding rectifcation orders; and
Issue binding order for the payment of money.
Small Claims Division of the
Local Court
Appoint an expert to provide evidence;
Hear and determine contractual matters relating to payments, breaches
of contract (i.e. work has not been carried out in a proper and
workmanlike manner);
Issue enforceable order for the payment of money;
Issue enforceable rectifcation order; and
Order a party to return goods that are in his/her possession.
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Consumer Guide
If you decide to be an owner-builder you take on the
role of the principal builder and are fully responsible
for the supervision and quality of building work as well
as payment of tradespeople and suppliers.
As an owner-builder you are responsible for a range
of tasks which may include insurance, occupational
health and safety of workers on site, arranging permits
and inspections, and ensuring tradesmen have
appropriate registration and insurance.
Owner-builders may:
Undertake all or part of the building works
themselves, except in areas that require licensed
tradespeople (e.g. electricians, plumbers and
gasftters);
Contract out all or part of the work to appropriate
tradespeople; and
Engage a building consultant to check the quality
of the work.
Advantages of being an owner builder include:
Increased control over the whole project;
Saving the cost of the builders margin; and
More fexibility.
Disadvantages of being an owner-builder include:
Legal responsibilities for ensuring the site is a safe
work environment; and
You are not able to claim on the Home Building
Certifcation Fund, although subsequent
owners can.
To check if you have the skills and knowledge to be an
owner-builder, ask yourself the following questions:
Can you interpret detailed plans and
specifcations?
Are you able to supervise all construction works?
Do you have the ability to coordinate the fow of
work by sub-contractors to enable you to complete
the home within your time schedule and budget?
Are you able to handle fnancial or contractual
disputes with sub-contractors and suppliers?
Can you be available on site to receive materials
and ensure that they comply with specifcations,
required quantity and quality?
Do you have the ability to distinguish technically
what is bad building work?
Do you have the experience to establish the value
of work completed to enable you to make accurate
progress payments to sub-contractors?
Do you know how to account for potential material
and labour cost increases that may occur during
construction?
Do you know how to organise insurance with your
insurance company or broker to cover liability for
personal injury and adequate insurance to cover
the work against hazards such as fre, storm,
damage, theft, public risk and accidents? Have you
budgeted for this cost?
Are you able to estimate the time needed to
complete the work?
An owner-builder is restricted to building or extending
a house and associated building work on a single
parcel of land in any six year period. If you intend to
carry out building work that is valued over $12,000
and extends the foor area you must obtain an Owner-
Builder Certifcate from the Building Practitioners
Board. The Certifcate remains valid for three years
from the date it is granted and can be extended for a
further three years.
12.0 Owner-builder
Consider carefully your decision to become an owner-
builder. Unless you are confdent that you have the
knowledge required to comply with building regulations,
including those placed on the Building Permit, you
should seriously reconsider if becoming an owner-builder
is the right choice for you.
Consumer Guide
If the land is owned by more than one person, all the
owners must apply for the Owner-Builder certifcate.
The owner-builder must provide the Owner-Builder
Certifcate to a registered building certifer in order to
obtain a Building Permit PRIOR to commencing the
building work.
Additional information can also be given from the
Building Practitioners Board on telephone
(08) 8923 9309.
12.1 Mandatory insurance requirements
Before starting building work, an Owner-Builder must
obtain a Home Building Certifcation Fund Owner-
Builder Insurance Policy from the Territory Insurance
Offce (TIO).
This insurance policy must relate only to the building
work to be carried out under the Building Permit as a
discrete project. This policy becomes active once the
Occupancy Permit has been issued.
An Owner-Builder will not personally be able to make
a claim on this insurance policy. This insurance
protects any future owners of the property against
fnancial loss for a period of 10 years from date of
completion of building, should the Owner-Builder fail
to rectify non-compliant building work to the standards
required by the Building Regulations.
Further information can be obtained from one of the
TIO Branches or by telephoning (08) 8946 2502.
12.2 Other insurance to consider
Other insurance that should be considered by the
Owner-Builder include:
General Insurance;
Workers Compensation;
Construction Insurance;
Key Person Insurance Loan; or
Mortgage Insurance.
As a minimum, the following insurances are
recommended:
Construction Insurance;
Public Liability Insurance;
Key Person Insurance; and
Workers Insurance (also called Contractors
All Risk Insurance).
For information on the above and to consider what key
questions you should ask when contacting insurance
brokers or insurance companies, please refer to the
Owner-Builder Manual.
12.3 Tradespeople
In the NT there is no occupational licensing
of trades people in the building industry (except
electricians, plumbers and gasftters). For more
information on choosing and hiring trades people;
coordinating sub-contractors and occupational health
and safety considerations, please refer to the
Owner-Builder Manual.
12.4 Tips
Clearly plan and defne the scope of works you
want completed by the tradespeople; and
An Owner-Builder must, no later than 14 days after
completion of buildings, make a legally-binding
declaration that the building work has been carried
out in accordance with the Building Permit.

To obtain an Owner-Builder application
form and a copy of the Owner-Builder
Manual, please go to the following
website: http://www.nt.gov.au/bpb/forms.
shtml#owner.
28
Consumer Guide
Builders must, as a minimum, comply with the termite
management requirements set out in the BCA.
The code requires the wall, roof and foor framing
(structural elements) and door jambs, window frames
and reveals, architraves and skirting of all new houses
be protected to reduce the risk of termite infestation.
The BCA sets out the minimum requirements only.
It is important that your builder discusses termite
management options and their maintenance
requirements (together with any cost implications)
with you PRIOR to fnalising your contractual
arrangements.
To understand what the minimum requirement is
under the BCA, and to decide on a preferred termite
management system for your home, you should
consider the following BEFORE proceeding with
building work:
Is the building in an area where there is a risk of
termite attack?
Will there be any members such as wall, roof and
foor framing, door jambs, window frames and
reveals, architraves or skirting susceptible
to attack?
Does the contract require termite management,
irrespective of the requirements of the BCA?
What method of termite management will I choose
as there a number of options available with varying
costs, durability and maintenance requirements?
Chemical systems have a limited life and therefore
require a higher degree of maintenance and
replenishment. Physical systems (e.g. concrete slabs,
exposed slab edge, metal shielding, stainless steel
mesh or graded stone) are generally designed to
last for the lifetime of the building but require more
frequent inspection.
Regular maintenance and monitoring is very important
to ensure the effectiveness of termite management
systems. You should regularly inspect yourself, and
every 12 months have a licensed pest controller
inspect and report on your home.
13.0 Termite protection
Regular maintenance and monitoring is
very important to ensure the effectiveness
of termite management systems.
Consumer Guide
Australian Consumer Law (ACL) national
legislation that defnes the rights and responsibilities
of traders and consumers.
Architect a qualifed person who provides building
design and contract administration services.
Building practitioner a person, frm or corporation
that is registered with the Building Practitioners Board.
The categories of a building practitioner include:
building certifer; certifying architect; certifying
plumber and drainer; certifying engineer; and building
contractor (residential).
There are two different categories for a registered
builder. A builder with a restricted registration can
construct detached houses, attached dwellings and
buildings of not more than two storeys. A builder with
an unrestricted registration can construct dwellings
of any height.
Building Act NT this Act provides the framework
for the control and standards of building in the
Northern Territory.
Building certifer a registered building certifer
assesses the Application for Building Permit to
ensure it complies with the Building Act and the
Regulations. The building certifer will issue Building
and Occupancy Permits. They will also tell you when
inspections are required.
Building Code of Australia - the Building Code of
Australia (BCA) is produced and maintained by the
Australian Building Codes Board (ABCB)
on behalf of the Australian, State and Territory
Governments. The BCA contains technical provisions
for the design and construction of buildings and
other structures, covering such matters as structure,
fre resistance, access and egress, services and
equipment and energy effciency, as well
as certain aspects of health and amenity.
Building contract a legal document that forms an
agreement between the builder and consumer about
home building or renovating. A contract written in
English that usually includes plans and specifcations
is required for most domestic work over $12,000 and
should be signed by both parties.
Building Control Area when building in the
Territory properties fall within designated Building
Control Areas. Within certain areas (e.g. in the
Greater Areas of Darwin and Alice Springs) you
require building approval and mandatory staged
inspections for building work. In the more distant
areas the requirements for mandatory inspections and
occupancy permits do not apply in respect of Class
1a detached houses and, in most cases, Class 10
non habitable buildings. To see if a property is within
a building control area, please check the following
website: www.nt.gov.au/lands/building/regulations/
areas/index.shtml
Building permit a building permit is a document
issued by a NT registered private building certifer
who approves the details of the building work and
ensures it complies with building legislation BEFORE
construction starts. Building permits are designed to
protect your building and, more importantly you.
Building Practitioners Board - is a statutory body
established by the Building Act and is responsible
for: registering builders; establishing and maintaining
a system of performance reporting to ensure that
information on builders past performance is available
and can be taken into account when assessing
their competence; monitoring builders compliance
with registration requirements; monitoring builders
competence and professional conduct ; conducting
inquiries into builders work and conduct and, if
necessary, disciplining them; and developing and
publishing codes of practice for reference by builders
and for use by the Board and the Director in assessing
builders work and conduct.
14.0 Glossary
30
Consumer Guide
Building regulations provides the technical
requirements for buildings in the NT. The relevant
technical requirements are set down in the National
Construction Code (Building Code of Australia); the
National Plumbing Code (ASNZ: 3500); and Code
of Practice for small on-site sewage and sullage
treatment systems and the disposal or reuse of
sewage effuent.
Class 1A building in accordance with the Building
Code of Australia, a Class 1A building is a single
dwelling being a detached house; or one of a group
of two or more attached dwellings (e.g. terrace house,
town house, unit).
Class 2 building in accordance with the Building
Code of Australia, a Class 2 building contains two
or more sole-occupancy units each being a
separate dwelling.
Class 10 building in accordance with the Building
Code of Australia, a Class 10 building is a non-
habitable building or structure (e.g. Class 10a
private garage, carport, shed; or Class 10b fence,
mast, antenna, retaining or free-standing wall,
swimming pool).
Completion the point at which works to be carried
out under the contract have been completed in
accordance with the plans and specifcations, and the
building owner has received an Occupancy Permit.
Completion date according to the contract, the date
when building works must be completed.
Defects work that is in breach of the contract by
failing to maintain a specifed standard or quality, or is
in breach of any implied guarantee.
Defects liability clause a clause in a domestic
building contract that gives the builder a specifed
period of time to fx defects arising out of contracted
works. The defect liability period should not be used
to fx defects that are known at the time of completion,
these should be fxed so that completion has been
reached before the fnal payment is made.
Engineer a person registered with the Building
Practitioners Board as an engineer who is qualifed
to undertake the design, documentation, supervision,
inspection and certifcation of buildings.
Fittings items that can be removed without
damaging the property (e.g. lightings, air
conditioners etc).
Fixtures items that are attached to the property and
cannot be removed without causing damage (e.g.
basins, toilets, built-in wardrobes).
Occupancy permit permit issued by the building
certifer after fnal inspection showing work has been
completed in accordance with the Building Permit.
An Occupancy Permit does not necessarily mean
that all building works is complete. There may still
be associated works in the contract (e.g. paving and
landscaping) that are incomplete. You are not required
to make your fnal payment until all work is complete,
despite being given an Occupancy Permit.
Owner-builder someone who carries out building
on his/her own property and has full responsibility
for workplace health and safety, site security, site
sanitation, environmental compliance etc because
they are taking on the role of a builder.
Plans drawings of the design of a home or
renovation completed by a designer/draftsperson,
architect or builder. These should be signed by the
builder and consumer and be part of the domestic
building contract.
Development permit a permit obtained from the
Development Consent Authority that relates to the
zoning and use and development of the land. This is
not always required but, if so, must be obtained before
you can be given a building permit by the building
certifer.
Progress payments these can also be called stage
payments and are required on completion of each
stage of building.
Consumer Guide
Registered builder a builder who is registered with
the Building Practitioners Board see defnition of
Building Practitioner. Membership of the Housing
Industry Association or Master Builders Association is
not the same as registration.
Scope of works plans and specifcations showing
what and how an owner wants to build. This should
be included when getting quotes and be part of the
contract and should be suffcient for obtaining a
building permit.
Specifcations detailed lists of specifc building
materials, appliances and fttings to be used in a
building or renovation.
Stages of building In the NT there are no specifc
descriptions of the stages of building that need to be
included in a building contract. However, you should
expect to see to see a similar amount of detail which
suffciently identifes the components of building work
for each stage as shown below which is an example
that has been taken from the Victorian Government
document Building and renovating. A Guide for
Consumers August 2010:
Base stage:
a) Home with a timber foor when the concrete
footings for the foor are poured and the base
brickwork is built to foor level.
b) Home with a timber foor with no base brickwork
when the stumps, piers or columns are completed.
c) Home with a suspended concrete slab foor
when the concrete footings are poured.
d) Home with a concrete foor when the foor is
completed.
e) Home for which the exterior walls and roof are
constructed before the foor is constructed when
the concrete footings are poured.
Frame stage: when a homes frame is completed and
approved by
a building certifer.
Lock up stage: when a homes external wall cladding
and roof covering is fxed, the fooring is laid and
external doors and external windows are fxed (even if
those doors or windows are only temporary).
Fixing stage: when all internal cladding, architraves,
skirting, doors, built-in shelves, baths, basins, troughs,
sinks, cabinets, and cupboards are ftted and fxed in
position.
Variations changes agreed to by the owner and
builder that are made to the building plans and
specifcations within the contract after the contract
has been signed.
32
Consumer Guide
16.0 Disclaimer
Whilst due care has been taken in the preparation
of this document and the information it contains is
believed to be accurate, neither the Territory, its
offcers, employees agents or contractors give any
warranty, express or implied, as to the completeness
or accuracy of the information.
The information given in this document is for the
information of consumers only and should be used
as a guide. It is not intended to be exhaustive, or to
replace the need for consumers to conduct their own
full due diligence. No responsibility will be accepted
by the Territory for any loss damage or expense that a
consumer may suffer arising from a consumer relying
on this document.
NAME PHONE EMAIL POSTAL
Northern Territory Architects Board (08) 8923 9312 ntab@nt.gov.au GPO Box 1680
DARWIN NT 0801
Building Advisory Services / Director Building
Control (NT Dept of Lands and Planning)
(08) 8999 8961 bas.lpe@nt.gov.au GPO Box 1680
DARWIN NT 0801
Building Practitioners Board (08) 8923 9309 bpb@nt.gov.au GPO Box 1680
DARWIN NT 0801
NT Consumer Affairs (08) 8999 1999
or 1800 019 319
consumer@nt.gov.au GPO Box 40946
CASUARINA NT 0811
Development Assessment Services (NT Dept
of Lands and Planning)
(08) 8999 6046 das.dpi@nt.gov.au GPO Box 1680
DARWIN NT 0801
Electrical Workers and Contractors Licensing
Board
(08) 8923 9307 electrical.licensing@nt.gov.au GPO Box 1680
DARWIN NT 0801
Plumbers and Drainers Licensing Board (08) 8923 9310 pdlb@nt.gov.au GPO Box 1680
DARWIN NT 0801
15.0 Who to contact
Consumer Guide
CHECKLIST 1
Building
= required

= not required

= suggested
Building Work Contract?
Building
Permit? Insurance?
Registered
Builder?
New house

Removing an Existing House to a new location
1

Renovating Bathroom Changing walls / fxtures / plumbing
1

Renovating Bathroom No change to walls / fxtures / plumbing
1*

Alterations / Extensions to Existing House increases foor area
1

Alterations / Extensions to Existing House No increase
in foor area
1
Existing House changing windows / roof
1

Additions to Existing House Solar hot water systems; skylight;
roof vents; satellite dish*

Carport / Verandah (to existing house)
1*

Garden Shed / Workshop
1*

Pergola / Shade Structure
1*

New Fence
1*

Renovating an existing Fence
1*

New Retaining Wall supporting building work
1*

New Retaining Wall not supporting building work
1*

Swimming Pools

1 Subject to provisions of the Building Act regarding type of work
* subject to relevant exemptions policy
NOTE: The above table provides a general overview of what building works require a contract; building permits; insurance and registered
builders. As it is not an exhaustive list, it is recommended that advice be sought from a building certifer.
34
Consumer Guide
Before signing a contract
Once you have selected the builder, is the contract
in English and legible? Do you understand the
contract? Do you need legal advice? Are the
contract documents fully completed? There should
be no blank spaces and the contract should
include everything that has been discussed;
Does the contract include all of the following which
are required in the Building Regulations:
- the building work to be carried out on a single
project;
- the building contractor;
- the building contractors registration number;
- the extent and the value of the work (all the
work you want done should be clearly detailed
in the contract and supported by appropriate
plans and specifcations that you have checked
thoroughly. You could consider speaking to
someone who has knowledge of construction
matters who may be able to advise you whether
the contract contains
enough detail);
- if the contract requires the payment of a deposit
it must specify the amount which must not be
more than 5% of the value of the work;
- the stages of the work to which progress
payments are linked;
- the amount of each progress payment;
- sets out a process of resolving disputes between
the building contractor and the owner of the
land;
Do you understand all the terms and are they
clearly defned in the contract? Consider for
instance the term lock up stage might mean
something completely different to you and the
builder;
Does the contract specify a start and fnish date,
or the number of days it will take to complete
the work? Consider what happens if there are
lengthy delays are you protected?
What happens if the work is not completed by
the builder within the time allowed for in the
contract? Will you receive any compensation
for any costs/losses (known as liquidated
damages, for example will the builder agree to
pay your rent if you are living elsewhere)?
What happens if you are late making a progress
payment?
Do you understand your rights to visit the
building site for the purpose of inspecting and
viewing the works?
If you have informed the builder of any special
requirements and fnishes, are they clearly
written in the contract?
What standard of work do you expect and is this
the same standard required under the contract?
Consider that your expectations may be different
to what is required at law;
Are you or the builder able to make any changes
(variations) to the contract once the project
has started? If so, you need to insure that any
changes to the contract are priced; recorded in
writing; supported by plans and specifcations
(if applicable); and a reasonable estimate of
any delay to the work which may result from the
variation is provided by the builder;
Do the staged payments match the value of
the construction at each stage? Consider what
may happen if you pay for more than has been
constructed. You could engage the services of
a quantity surveyor to advise you on the costs
of construction and the total cost each progress
payment. The fnancial effect of paying for work
not yet constructed can be disastrous in the
event of the death of a builder or the collapse of
the company;
You should consider approaching your fnancial
lending institution; they may be able to advise
you further about progress payments; whether
they require inspections at each stage; and/or a
valuation service. In some cases they may wish
to make the payments on your behalf; and what
happens in the event of the death of the builder
or the collapse of the company?
CHECKLIST 2
Consumer Guide
Before construction starts
Has the contract been signed by both parties?
Has the builder given you a complete, signed set of
the contract documents?
Have you provided proof of ownership of the land
to your builder?
Has the Building Permit been issued?
If building in a suburb with development covenants,
has the developers approval (if applicable), been
received by the builder?
Is the proposed work on your land and wholly
contained within the boundaries of your block;
correctly positioned on your block and in relation to
your block boundaries; and set out in accordance
with the design plans? To be confdent that the
building accurately conforms to these three things,
employ a registered surveyor. The surveyor will
attend on site and take measurements to locate
block boundaries and then place markers so the
builder knows exactly where to commence work;
Has confrmation of fnance approval been
received? Your builder may request a copy of the
fnance approval; and
Has the builder invited you to attend a pre-start
meeting? At that meeting you will be asked to make
a number of important decisions about the types of
materials and fttings and about colours. If you must
make any last minute changes, make them now
and not after construction starts unless the contract
has been amended accordingly.

CHECKLIST 3
36
Consumer Guide
Construction
You should be given the name and phone number
of your contact person in the builders offce.
You should confrm all the important agreements
or comments in writing during the home
building period.
You should arrange with the builder to access the
site for the purpose of inspecting and viewing the
works. Check to see what your contract says.
For your own protection, you should only deal with
the builder and the builders supervisor on-site and
not the tradespeople on-site.
You should arrange to take photographs of the work
at regular intervals, particularly any part of the work
that may be of concern to you.
You should purchase a diary to record all the day to
day happenings, including the time and date of all
telephone conversations as well as the name of the
person you spoke to and what was discussed.
CHECKLIST 4
Consumer Guide
How to Contact Us
Postal
GPO Box 2520 DARWIN NT 0801
Telephone +61 8 8999 5511
Facsimile +61 8 8924 7044
Email
Feedback.dlp@nt.gov.au
Web
www.nt.gov.au/dlp

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